Analyst Stephen Laws commented, "Given shares are trading in line with our target, which is based on 95% of 12/31 book value, we are downgrading shares to a Hold from a Buy. We believe dividends will drive the majority of returns from current levels. Given investor concerns of higher interest rates, we believe it is unlikely that shares of agency MBS managers will trade at or above book value in 2014. The current DB forecast is for ten-year treasury rates to reach 4% by year end, and we believe shares of agency MBS manager will continue to trade at a discount to book value in a rising rate environment."

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